I wluld be surprised if AA lost any pilots or FAs, or very small numbers, given the protection they get through their unions/contracts and the fact that pay is pbasedon seniority, there is little incentive to get a new job unless they expect the company to fold.

As it is likely that AA will simply bankrupt under Chapter 11 and re-organize, they probably expect their contracts to be re-negotiated and to lose some advantages, and know what to expect having seen similar situations recently at AC, DL, NW, US and UA, but they will still be before off than if they started at the bottom of the seniority list with another airline. Also, in case that AA does not go bankrupt, its shareholders might prefer, they may simply re-capitalize but I would still expect some contract review before this happens.

Quoting xdlx (Thread starter):Given the current financial situation, and the fact that things at AA are still running in the same direction.
How many pilots will AA lose this month?

This has nothing to do with AA and only to do with the stock market. AA retirment plans are in the market but no stocks are AMR stock. Pilots have the choice of taking a retirement planned locked in from prices 60 days earlier. That is why pilots left it has nothing to do with how the airline is running.

Quoting CuriousFlyer (Reply 1):I wluld be surprised if AA lost any pilots or FAs, or very small numbers, given the protection they get through their unions/contracts and the fact that pay is pbasedon seniority, there is little incentive to get a new job unless they expect the company to fold.

See above
Senior pilots leaving is really not a bad thing. There are many many pilots out there and many very qualified pilots who do not have jobs and of course many Eagle guys who will flow through. They will need to start some more training etc.. But junior pilots make less money so really it is probably a good thing for AA that senior guys are leaving. AA has not hired a new pilot in years. I think their youngest pilot came on in 2001 one or something like that. There are plenty of very qualified senior first officers at AA, and captains and eagle who will take these spots up. They just need to prepare ahead of time.

As for notice I think 30days?

"It was just four of us on the flight deck, trying to do our job" (Captain Al Haynes)

Quoting CuriousFlyer (Reply 1):I wluld be surprised if AA lost any pilots or FAs, or very small numbers, given the protection they get through their unions/contracts and the fact that pay is pbasedon seniority, there is little incentive to get a new job unless they expect the company to fold.

You are looking at this in the wrong way. The issue is not about pilots leaving for another carrier, the issue is do the pilots want to retire now, or wait. AA has a very senior workforce, especially among the pilots, and with the Stock Market tanking the way it has, many pilots are trying to lock in the retirement benefits before these shrink with the stock market. With the rumblings of Chapter 11 possibilities circling on wall street, this is only going to drive more guys to jump off the ship and lock in their retirements before the retirement benefits are dumped in Bankruptcy the way UAs was. AA is going to have a lot of openings real soon because of this in my opinion. This will help them a lot on labor costs.

According to how I understand it; as AA pilots "retire" the Flow Thru program is now protecting
the back fill. During the recent AA/Eagle Spinoff it is apparent AA will absorb the Eagle "most SENIOR"
( Some 20+ yrs ) pilots into the mainline.

The reason for the question brings up the Training Capacity at AA, I know personally one of the
first in the Flow Thru program. He went to intial for the Super80 and flew 6 weeks on the line before
eligible for the 738 initial.
What is the capacity of the Flight Trainning department at AA to replace the atrition, 100? 150? @ month?
Can the training cycle keep up with the atrition?

Which was what happened on a monthly basis right before DL declared BK. DL could not afford the lump sum payouts($200-$300Mil/per month) which were due when pilots retired, so the defined pension benefit went to the PBGC in BK.

also a lot of the eagle pilots are not making it thru training on the S80 and they are washing back to eagle. So if this is a scare tatic this is working on getting people to retire and then they have the whole winter to train new pilots and get the flying levels back up again.

You are horribly misinformed. Eagle pilots who go to AA and fail training are NOT able to flow back to Eagle. Have Eagle pilots (all very senior CA's with 20+ years seniority at Eagle) had problems on the 80? Yes. They all went from flying modern equipment (ERJ/CRJ) to flying an older era plane. Additionally they were the first new hires at AA in 10+ years. The training department wasn't quite up to speed on training new hires.

Quoting xdlx (Thread starter):Given the current financial situation, and the fact that things at AA are still running in the same direction.

If by "current financial situation" you mean the general stock market, then yes, the current stock market situation is causing a higher rate of retirements than normal at AA. If you mean AA's current financial situation, then you would be mostly incorrect.

Unknown (publicly). AA management makes an estimate based upon the number of pilots who maintain the "lock-in" option and a lot of historical analysis.

Quoting xdlx (Thread starter):How much advance notice do they need to provide to the company to exercise those rights?

Minimum notice is... one day. By the end-of-business on last day of each contract month any pilot that has an active lock-in option must either: (a) re-new, (b) revoke, or (c) retire. If retirement is selected, the effective retirement date is the first day of the next contract month.

I can not comment on the efficiencies or lack thereoff in the "Academy", and I was just trying to establish
the CAPACITY of the TRAINING department to ADJUST to todays realities.
Obviously like AA itself they are reacting NOT PROACTIVE!

I've heard CO is planning on a lot of retirements soon as those who were extended by the age 65 rule
are now nearing that age.
Not sure how many per month my friend said but it's a lot of training in the next several years.

Well .... all airlines have been waiting on this, the reprieve they received when FAA "extended" the retirement
age to 65.
But the same FAA now may dictate you need more rest 9h instead of 8h min of rest between work periods.
The industry is still confused as if this new requirement will cause additional needs for crewmembers, or parking
airplanes and laying people off as the ATA position reveals.

Can AA, DL, CO/UA with their sizebale operations endure a training cycle without affecting their current operations?

I received an email from the Eagle MEC and it said they have (or are in the process of) negotiating about 825 flow through positions. That's going to leave quite the vacancy here at Eagle if all of those pilots choose to jump ship and go to AA.

I must admit to not knowing many of the details about how the retirement plans work in US airlines but it does not sound great to me. How you can see your retirement fund wiped out if the airline cannot afford it or moves it around. That would never be allowed over here. At CX every month they pay their contribution to your retirement into a separate account held and managed by a brokerage firm or bank (HSBC at the moment). That money is yours to invest as you see fit. if you leave the airline, you are entitled to walk away with that money (Since it is yours). Of course the stock market condition affects how much you make and lose on that money but instead of investing it into funds, you can keep it as pure cash. The point is that the airline has already paid it out. They no longer have anything to do with that cash once it gets paid every month and you do not get stories of pilots getting screwed when the airline runs low on cash and decides to wipe out retirement funds. How the government over there can allow this to happen is mind boggling to me. There are laws regarding things like this over here.

The only way to "lock in" their retirements AFAIK is a cash-out option. In a bankruptcy scenario, pensions are not necessarily secure, even if the pilot has punched out. The pension exists so long as the company is in a position to pay it out of continuing cash flow. Which is never a sure thing. Upon a default, the pension would go to PBGC. Leaving active duty would not save you. That is, unless you took a lump sum out.

Quoting CX Flyboy (Reply 18):They no longer have anything to do with that cash once it gets paid every month and you do not get stories of pilots getting screwed when the airline runs low on cash and decides to wipe out retirement funds.

You could consider a flip side; here, not only do pilots and others make a salary, but they also have a title to a future salary upon their retirement, so long as the company is solvent. This is also true for cops and teachers, among others. Other people without pensions save out of their salary in preparation to provide their own income in retirement. Which these pilots may also do to provide extra security, for all I know.

But a pension is designed to be an at-risk asset that is often worth considerably more than people expected. In some scenarios, union bargaining arguably can extract higher pensions than is feasible to pay, merely because management would rather have a liquidity crisis 20 years from now, rather than a liquidity crisis right now. The ideal is to never have such a crisis, but with organized labor, they too perhaps under-value stability, preferring a higher compensation with a bit less safety. As you say, saving one's private assets is a sure way to avoid corporate solvency risks.

That is a pretty accurate statement about many defined benefit plans in the US. What you are describing is more of a defined contribution plan and that works the same in the States. It's known as a 401(k) plan here.

An employer funds the liabilities of a defined benefit plan over time and invests the assets. If the stock market drops, those assets are negatively impacted and the employer will likely have to invest more money than they originally planned to do. The liabilities are actuarially determined annually to see how much the plan should have set aside now to fund estimated payouts over time assuming certain asset performance.

I worked on Delta's DB plan from 2000-2004. Delta was hit by a perfect storm. Their pension plan had been pretty well funded but after 9/11 the assets tanked and so did their revenues. Delta received permission to defer payments into the plan and then when they entered bankruptcy they decided to wind up the plan. Since the assets were reduced due to market performance there were not enough assets to meet the plan's liabilities at the time of wind up and plan participants got less than they were promised.

Quoting CV880 (Reply 6):Which was what happened on a monthly basis right before DL declared BK. DL could not afford the lump sum payouts($200-$300Mil/per month) which were due when pilots retired, so the defined pension benefit went to the PBGC in BK.

Throw qualifed (tax-sheltered) status vs. non-qualified status into the mix and things get really fun. The large lump sum payments due to Delta's pilots were non-qualified and had to be paid from general revenues, not from the pension plan, and that money had to be found quickly.

Fun fact: it was me who calculated the Delta pilots' pension benefits in late 2003 / early 2004, when such large numbers of pilots were retiring.

Thanks for the replies. I still think the way it is done out here is better. The company regards retirement fund payouts every month simply as part and parcel of their monthly staff salary bill. The company does not invest the money, the individual does. The company cannot be blamed for underperforming funds since it was up to the individual to choose how to invest the money. If the company goes bankrupt, the retirement money does not even factor into it, since it is already held by a third party and has nothing to do with the airline anymore. That money goes straight to the individual since it is already held in their name, just by a third party on their behalf. No chance of the pilot (or whoever) losing out.

Quoting Flighty (Reply 19):union bargaining arguably can extract higher pensions than is feasible to pay, merely because management would rather have a liquidity crisis 20 years from now, rather than a liquidity crisis right now.

Why promise something in the beginning when you know that you will be unable to fulfil that promise?!

Quoting CX Flyboy (Reply 18):I must admit to not knowing many of the details about how the retirement plans work in US airlines but it does not sound great to me. How you can see your retirement fund wiped out if the airline cannot afford it or moves it around. That would never be allowed over here. At CX every month they pay their contribution to your retirement into a separate account held and managed by a brokerage firm or bank (HSBC at the moment). That money is yours to invest as you see fit. if you leave the airline, you are entitled to walk away with that money (Since it is yours). Of course the stock market condition affects how much you make and lose on that money but instead of investing it into funds, you can keep it as pure cash. The point is that the airline has already paid it out. They no longer have anything to do with that cash once it gets paid every month and you do not get stories of pilots getting screwed when the airline runs low on cash and decides to wipe out retirement funds. How the government over there can allow this to happen is mind boggling to me. There are laws regarding things like this over here.

This is a huge problem with US accounting and pension rules. Companies are allowed to accrue their pension contributions. They don't have to actually make a contribution, they can defer the contribution and show it as a payable on their balance sheets. That is why so many people are nervous. When GM and UA declared Chap. 11, they had billions in unfunded pension contributions on their balance sheets. The pension fund then becomes another creditor (like any other creditor) with the government only guaranteeing a small portion of the actual amount owed to the employee. It is another of the great ponzi schemes that contribute to the current state of the financial mess in the US. The government and companies make all of these promises to people to get their votes and support, but no one puts aside the money to fund the promises. Then, when it is time to pay out, it's someone else's problem. It won't end until we have someone in power who is more interested in doing the right thing than getting re-elected, which is very unlikely based on what's been happening lately.

Quoting PVG (Reply 22):It won't end until we have someone in power who is more interested in doing the right thing than getting re-elected, which is very unlikely based on what's been happening lately.

Curious what you mean by right thing. Front-funding all pensions? I totally agree there. Especially for public employees. Let's have those liabilities show up brightly on each yearly budget.

If you mean making pensions the first priority during bankruptcy, I don't agree morally with that. Nobody ever promised that. That would be a strong upgrade of pensions that wasn't even bargained for.

25 lightsaber
: I honestly expect larger numbers. When AA declares BK, it will destroy the retirement for many senior pilots. At that point AA will stop having pilot

26 mcg
: So the AA pilots have the option to retire and take a one-time cash payment rather than monthly payments for the rest of their life? If that's the cas

27 CX Flyboy
: This says a lot about the financial state of your company if you cannot even afford the monthly pension contributions up front. It should be regulate

28 flyby519
: There are roughly 240 AE CAs that have seniority numbers on the AA seniority list, and will be given the opportunity to chose yes/no to flowthrough t

29 type-rated
: Yes, that's the way it works. Most retirees sit down and calculate which would give them a larger retirement, a lump sum or monthly retirement paymen